PROJECT SUMMARY/ABSTRACT Acute respiratory distress syndrome remains a devastating syndrome affecting more than 200,000 patients annually in the U.S. with a mortality rate approaching 40%. Currently, there are no pharmacological treatments available that reduce mortality. Consequently, innovative therapies are needed. In various preclinical models of acute lung injury, mesenchymal stem cells (MSC) have been shown to secrete multiple paracrine factors that can reduce lung endothelial and epithelial permeability, decrease inflammation, enhance tissue repair, and inhibit bacterial growth, ultimately decreasing mortality. Despite a favorable safety profile in early clinical trials, however, MSC have the capacity for spontaneous malignant transformation following multiple passages in culture as well as the ability to promote tumor growth in small animal models. In the prior grant period, we found that microvesicles (MV) released by human MSCs were as biologically active as the parent stem cells in both inflammatory and infectious causes of acute lung injury. Once considered cellular debris, MVs, anuclear circular membrane bound vesicles 50 nm to 200 nm in size that are constitutively released by many cell types, are now recognized as important mechanisms for cell-cell communication. Our overall hypothesis for the current proposal is that MSC MVs are biologically active, and its therapeutic activity in severe bacterial pneumonia is mediated through transfer of mRNAs, microRNAs, proteins and/or organelles from the MVs to the injured alveolus. In Aim 1, we will further uncover the therapeutic mechanisms by studying the effect of human MSC MVs on lipid metabolism and the activity of ATP-binding cassette transporter, multidrug resistance associated protein (MRP)1, in mice injured with severe pneumonia. We hypothesize that MSC MVs will inhibit MRP1 activity in monocytes/macrophages and decrease the enzymatic conversion and secretion of leukotriene (LT)A4 to LTC/D/E4, leukotrienes involved in lung protein permeability, and increase the conversion into LTB4, leukotriene involved in bacterial killing. In Aim 2, we will test the effect of human MSC MV on net fluid transport in both a novel ex vivo perfused human lung injured with severe bacterial pneumonia and in primary cultures of human alveolar epithelial type II cells injured by an inflammatory insult. We hypothesize that MSC MVs will prevent pulmonary edema formation by restoring the apical membrane expression of the major epithelial sodium channel, ?ENaC. In Aim 3, we will determine if human MSC MVs are therapeutic in a sheep model of sepsis following smoke inhalation and Pseudomonas aeruginosa pneumonia. We hypothesize that MSC MVs will improve oxygenation (PaO2/FiO2) by restoring alveolar fluid clearance, reducing lung protein permeability and alveolar inflammation, increasing bacterial killing, and decreasing pulmonary vascular pressure by releasing nitric oxide and restoring the glycocalyx layer on the endothelium. The overall goal of the current submission is to further develop the biological rationale for using MSC MVs in acute respiratory distress syndrome in anticipation for a possible FDA IND submission.